THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM. Happening now, breaking news -- he's made a career of going after ethics violators, but after a report links him to a prostitution ring, the New York governor, Eliot Spitzer, says he's failed to live up to his own standards. And an apology has come forward and there is an investigation underway right now. We're going to stand by for details.

Barack Obama shakes the Democrats awake from their dream of a dream team. He makes it clear he's not running for vice president and he's accusing the Clinton campaign of hoodwinking voters. And a congressman says Islamic extremists identify with Barack Obama's middle name and would cheer an election victory. Sharp reaction from both campaigns coming in right now.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

He's one of the country's best known governors -- a rising star in the Democratic Party. Now a senior source close to the investigation tells CNN the New York governor, Eliot Spitzer, is under investigation for allegedly meeting with a prostitute at a Washington, D.C. hotel. It's a bombshell with national implications. This is breaking news we're following from all angles.

Let's begin this hour with Mary Snow. She's watching the story for us.

What do we know -- Mary? What's going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, it's being described in New York by some as a political earthquake. Eliot Spitzer has not addressed these reports. He's admitted nothing. He has made an apology in a very brief statement.

Now, the question is -- that is being asked -- whether or not he can survive this. He has said nothing about stepping down.

(BEGIN VIDEOTAPE)

SNOW: "The New York Times" headline linking New York Governor Eliot Spitzer Eliot Spitzer to a prostitution ring was so shocking, New York reporters at first thought it was a joke. But soon after, Spitzer -- with his wife by his side -- made this public statement.

GOV. ELIOT SPITZER, (D) NEW YORK: I have acted in a way that violates my obligations to my family and that violates my or any sense of right and wrong. I apologize first, and most importantly, to my family. I apologize to the public, whom I promised better.

I do not believe that politics in the long run is about individuals. It is about ideas, the public good and doing what is best for the State of New York.

But I have disappointed and failed to live up to the standard I expected of myself. I must now dedicate some time to regain the trust of my family.

SNOW: Spitzer, a father of three daughters, took no questions and said he would report back in short order.

Two sources with knowledge of the investigation tell CNN that the New York governor allegedly met with a prostitute in a Washington hotel. One of the sources said the alleged involvement was caught on a wiretap.

The charges are especially shocking since the New York Democrat had built a reputation fighting corruption on Wall Street while he served as attorney general. "Time" magazine even called him "Crusader of the Year". His political star rose and he was elected in 2006.

For now, Spitzer is calling this a private matter.

(END VIDEOTAPE)

SNOW: Now, the Republican Governors Association is calling on Spitzer to step down. New Jersey Governor Jon Corzine, of the neighboring state, calls these -- in his words -- "serious and disturbing allegations that are completely at odds with the man I know." Corzine adds: "They come as a complete shock." -- Wolf.

BLITZER: Everyone seems to be shocked by this.

All right, Mary. Thanks very much.

Our justice correspondent, Kelli Arena, talking to her sources about these allegations. She's getting some new details about the criminal complaint.

Kelli, what you learning?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: OK, well, Wolf, to recap a little bit of what Mary just said, two sources with knowledge of the investigation do tell CNN that Spitzer allegedly met with a prostitute in a Washington hotel last month. One of those sources also says Spitzer's alleged involvement was caught on a federal wiretap.

Now the information is all laid out in a criminal complaint, which was unsealed last week when the government charged four people with operating a high-end prostitution ring. Now, prosecutors say that the ring charged anywhere between $1,000 and more than $5,000 an hour, depending on the prostitute, and the ring known as the Emperors Club VIP. One official says that Spitzer is referred to as "Client Number 9" in that criminal complaint. It's important to note, though, Wolf, Spitzer is not facing charges. Investigators are, though, expected to eventually look into how he allegedly paid for encounter, whether he hid the money trail, whether he circumvented any banking laws.

And the complaint describes how Customer Number 9 was supposed to meet with a prostitute at a Washington hotel, where the key to the room would be left and it says that he allegedly owed money on his account, indicating that he had arranged for a prostitute before.

The alleged prostitute in the complaint, a woman by the name of Kristen, said that she thought the session with "Client Number 9" went very well -- Wolf.

BLITZER: You know, as you look at this situation unfold, it's such a shocking situation for a lot of people who have covered this guy over the years.

ARENA: It is.

BLITZER: And we saw him come out with his wife standing obviously by his side. But what else are you learning, Kelli, that gives us a little bit more insight into the nature of the criminal probe that apparently is obviously well underway?

ARENA: Well, the first part, obviously, of that investigation, was to take down this prostitution ring, Wolf. I mean that was the main thing. And so they think they've got the four alleged leaders of that ring, they've charged them and that's all laid out in the criminal complaint.

The next part of this whole process is -- from what I can glean -- is looking into how that organization allegedly laundered the money that it brought in. And then, once they go from there, it's to find out what, you know, what, if any, laws were broken in that process.

And it's not like they're going to go out there and haul off a bunch of Johns and bring them in and, you know, charge them for their alleged involvement in prostitution. I mean what they're looking for now is to find out, you know, what happened with the money.

So no customers were named in that complaint, Wolf. I mean -- it said there were known and unknown people that were involved. This is more about let's find out exactly how this thing was run.

BLITZER: Kelli Arena. Thanks very much.

Eliot Laurence Spitzer is 48-years-old. He served as the New York State attorney general from 1998 to 2006. He was elected governor of New York in 2006 with a 69 percent majority vote. He's also a Democratic super-delegate. He supports Hillary Clinton in her bid to become president.

If Spitzer resigns, he would be replaced for the duration of his term by, the lieutenant governor, David Paterson. He's a strong supporter of stem cell research, programs fighting domestic violence and he's an advocate for the rights of the disabled.

Paterson himself is blind. He talked about his condition with our Brian Todd back in 2006, after Spitzer had tapped him as his running mate.

(BEGIN VIDEO CLIP)

LT. GOV. DAVID PATERSON, (D), NEW YORK: I suffer from optic atrophy, which is scarred tissue that lies between the retina and the optic nerve. I think when you have a visual impairment, you feel that it's affecting every aspect of your life.

And it, invariably, does -- our ability that most frightens us. In other words, it's the light, not the dark, that makes us so afraid. It's just sometimes even with the ability -- I mean we just worry if we can live up to those expectations.

(END VIDEO CLIP)

BLITZER: Patterson served for two decades in the New York State Senate before becoming the lieutenant governor.

Let's go to Jack Cafferty. He's in New York.

He's got "The Cafferty File" -- Jack, you've met Eliot Spitzer over the years. You've been a New York reporter for a long time. You know, you think you've seen it all until something like this comes along.

JACK CAFFERTY, CNN ANCHOR: Well, you know, I mean I suppose in the grand scheme of things, Wolf, that this could be considered a minor crime when you think about some of the characters that have been on the crime pages of New York newspapers over the years, including all the members of organized crime etc.

That being said, the reason this one is such a stunner is this was -- he was crusader rabid. I mean he went after a lot of bad guys, held himself, we thought, to some very high standards and was generally looked up to by the public at large.

He was so self-righteous is a kind of a trite phrase -- but he was actually held in contempt by a lot of his political contemporaries because he considered himself above the rest of them. And that's why when something like this happens, it lands like a ton of bricks. My guess is there are other shoes to fall in this thing. We'll just have to stay tuned, as they say.

John McCain sometimes jokes with the press that he's got more scars than Frankenstein. But the scars are actually a serious reminder of the surgery the presumptive Republican nominee for president had in 2000 for melanoma -- a potentially deadly form of skin cancer.

When McCain ran for president eight years ago, in 2000, he opened up his medical history for the public to see. Quite a history it is, too -- 1,500 pages of medical and psychiatric records that the Navy used to track the health of former POWs. You know, McCain was a POW in Vietnam for five years. So far, though, in this campaign, McCain hasn't made his medical records public. The campaign says it plans to do so next month.

One of the doctors who got a look at McCain's medical records back in 1999 wrote an interesting piece in "The New York Times" over the weekend about the Arizona senator's history of melanoma. McCain has, in fact, had four melanomas. The most serious one was spotted on his temple in 2000. He had the surgery then to determine whether that melanoma had spread to the lymph node in his neck.

The results suggested it had not. McCain's campaign has said recently there's been no spread detected in the three or four checkups that he's had every year since then. The other three melanomas McCain had were not considered serious. And they add that his doctors now consider McCain to be in "very good health."

Nevertheless, McCain would be the oldest person ever sworn in as a first-term president of the United States. He'd be 72. And the health of an incoming president that old is something that has probably crossed the minds of a lot of voters.

So here's the question: How much an issue is John McCain's history of melanoma, a potentially deadly form of skin cancer?

Go to CNN.com/caffertyfile. You can post a comment on my blog -- Wolf.

We're going to take a closer look at how other politicians have emerged, tattered by intact, from public sex scandals.

And a rude awakening for many Democrats hoping for a dream ticket, as some call it. As Barack Obama says, he's not running for vice president. Why he's accusing the Clinton campaign of hoodwinking voters.

And will Democrats give the stamp of approval to a proposed mail- in do-over of Florida's primary? We're going to hear the pros and the cons.

Lots of news happening today, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're continuing to follow our top story. The New York State governor, Eliot Spitzer, named in a criminal complaint for allegedly meeting a prostitute in a hotel room. We're going to have the very latest on what we're getting. Much more on this story coming up.

But let's turn back to the presidential race right now. Many Democrats are dreaming that Hillary Clinton and Barack Obama will team up to run against John McCain. Former President Bill Clinton gave that idea his support this past weekend. But Barack Obama today is offering a reality check.

Let's go to CNN's Jim Acosta, who is watching this story for us -- Jim, I take it that the Illinois senator not yet ready to sign on the dotted line.

JIM ACOSTA, CNN NATIONAL CORRESPONDENT: Not just yet, Wolf.

Barack Obama is questioning how Hillary Clinton can say he's not ready to be president and at the same time suggest they run on the same ticket.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): Many Democrats might call it their dream ticket, but Barack Obama is telling voters to wake up.

ACOSTA: A just released "Newsweek" poll finds an overwhelming 69 percent of Democrats in favor of Obama and Clinton joining forces. But the survey does not address the touchy subject of who should top the ticket.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I've had people say I wish I could vote for both of you. Well, that might be possible some day.

(APPLAUSE)

ACOSTA: Even the former president has gamed out such an alliance.

WILLIAM JEFFERSON CLINTON, FORMER PRESIDENT OF THE UNITED STATES: He would win the urban areas and the upscale voters and she wins the traditional rural areas that we lost when Reagan was president. If you put those two things together, you'd have an almost unstoppable force.

DAVID GERGEN, CNN SENIOR POLITICAL ADVISER: They have no interest in having her as number two on the ticket.

ACOSTA: But CNN political analyst David Gergen believes it's a clear case of the Clintons campaigning for super-delegate support.

GERGEN: Because even though they might be behind in pledged delegates, the Clinton people believe that, at the end of the day, they can turn the super-delegates. And this will one of the arguments that might sway them. And they would like to put enormous pressure on Barack Obama to accept this deal.

(END VIDEOTAPE)

ACOSTA: But Barack Obama, who holds the delegate lead at this point, has all but ruled out being on the bottom of the Clinton ticket. He said so today, Wolf.

BLITZER: All right, thanks very much. Jim Acosta watching this part of the story.

It could be a first class solution to Florida's dead letter Democratic primary. The state was punished for moving up its balloting. Its delegates were ruled invalid. But now there's talk of a re-vote by mail.

Let's go to our national correspondent, Susan Candiotti. She's in Miami. She's watching this story for us.

This is a somewhat controversial proposal, letting the voters in Florida mail it in, if you will.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hey, Wolf.

In Florida, it's always controversial when it involves elections. Calling all postal carriers here in Florida -- you could be playing a big role in solving the Democratic delegate dilemma.

(BEGIN VIDEOTAPE)

CANDIOTTI: Put a stamp on it -- could the U.S. Postal Service end up sorting things out in Florida -- a mail-in primary do-over allowing Democrats one more chance to make their votes count?

Senator Bill Nelson says it's better than anything else on the table.

SEN. BILL NELSON (D), FLORIDA: And all these people who say you go to a caucus or you split the delegation evenly, that's not expressing the will of the Florida voters, of which almost two million turned out.

Congressman Debbie Wasserman Schultz argues a mail-in ballot has wrong written all over it.

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: It would be a risky experiment for us with an election that has stakes as high as a presidential election does. We've never done a mail in ballot statewide.

CANDIOTTI: A first time for everything, says Florida lawmaker Dan Gelber. A Democrat who's staying neutral, he says just get the playbook from other states like Oregon, who swear by a mail-in primary. Cheaper, too -- an estimated $6 million compared to $25 million that neither Florida nor the Democratic National Committee will pay for.

DAN GELBER (D), FLORIDA STATE SENATE: And right now, we've got to start thinking about what's best for Florida and, frankly, what's best for Democrats in November or for this country when everybody wants change.

CANDIOTTI: Wasserman Schultz is worried about signature fraud, disenfranchising college students, getting addresses wrong and having private donors instead of states footing the bill. She favors seating the delegates already chosen.

WASSERMAN: There's a way to solve this without totally redoing this and causing more chaos.

CANDIOTTI: Gelber says it could mean another record vote -- at least another million people who would simply have to lick a stamp instead of returning to the polls.

GELBER: Most importantly, it would give us a chance to make it right. And here in Florida, we want to try to make it right because we have too long a history of getting it wrong.

(END VIDEOTAPE)

CANDIOTTI: Now, Obama supporter Congressman Robert Wexler believes that Florida ought to stick with the delegates already chosen in the primary and compromise on a plan to divvy them up -- Wolf.

BLITZER: Susan Candiotti watching this story -- Florida reelection. What a story.

All right, Susan. Thanks very much.

We're getting reaction in to this story linking the governor of New York to a prostitution ring. Eliot Spitzer reacting publicly just a little while ago, apologizing to his family, apologizing to the people of New York and not confirming any involvement. But we are getting reaction, including from a former governor of New York, Maria Cuomo, who says this: "It is an excruciating personal tragedy for the governor, his family and the rest of our society, to whom he has meant so much."

And we're also getting reaction in from the New York State Assembly Republican leader, James Tedisco. He said this... (BEGIN VIDEO CLIP)

JAMES TEDISCO, NEW YORK STATE ASSEMBLY MINORITY LEADER: If he is involved in something like this, the ethics of it and the fact that he made that a cornerstone of his gubernatorial efforts in becoming the chief administrator. And I think no question, if he is involved -- and I'm not saying he is, because we don't know all the facts -- I would say he has to resign.

(END VIDEO CLIP)

BLITZER: And Peter King, the Republican congressman from Long Island, says this. He says -- and I'm quoting -- "I never try to take advantage or gloat over a personal tragedy. However, this is different. This is a guy who is so self-righteous and so unforgiving, he has to step down. No one will stand with him."

That's the Republican congressman, Peter King, from Long Island.

We're going to have much more on the investigation into Eliot Spitzer and his alleged link to a prostitution ring. That's coming up here in THE SITUATION ROOM.

Also, anti-depressants, painkillers, hormones and more -- all possibly in your drinking water. We have details of a very troubling new investigation impacting millions and millions of Americans.

Plus, details of the new flare-up over Barack Obama's middle name -- find out what one U.S. congressman is saying that the Obama campaign calls -- and I'm quoting now -- "degrading."

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, a new report says your tap water may contain traces of multiple prescription and nonprescription drugs -- really. The "Associated Press" says it investigated drinking water supplies serving 41 million Americans and found extremely small quantities of a myriad of drugs, including antibiotics, anti-depressants, hormones and pain medications. All were at levels far below a medical dose. But there is concern about long- term exposure.

A hectic Mideast tour is announced for Vice President Cheney. He leaves Sunday on a diplomatic mission including Oman, Saudi Arabia, Israel, the West Bank and Turkey. President Bush says Cheney will push the Palestinians and Israelis to move forward in their peace process. The war in Iraq and the high cost of oil will also be high on his agenda, as he meets with Middle East leaders. Speaking of oil, $108 a barrel. That's the latest record high for crude oil -- up 24 percent in just the last month. And brace yourself because gas prices are going to follow suit. The government forecasting pump prices will peak at around $3.40 a gallon this spring. But some analysts are now saying $4 a gallon is looking ever more likely.

And everything is looking good for a rare nighttime Space Shuttle launch just about nine hours from now. Shuttle Endeavour is scheduled for the longest trip yet to the International Space Station -- 16 days. It will deliver a Japanese lab and a Canadian robot that will be able to perform some of the space walks currently done by astronauts.

That's a look at what's happening now -- Wolf.

BLITZER: Thanks very much, Carol Costello. We'll be checking back with you.

A scandal exploding in New York sending shock waves across the country. The state's governor linked to a prostitution ring. Can his political career survive? What will his political enemies think? That's coming up.

Also, Senator Clinton is now reacting, as well.

And what about that one U.S. Congressman -- what he had to say about Barack Obama. It has supporters saying he needs to be "denounced across the board." We're going to have new details of a growing controversy.

Plus, the new trend in insurgent attacks that's taking a deadly toll on U.S. troops in Iraq. It's been a deadly day there for U.S. forces.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, while Hillary Clinton and Barack Obama battle for the Democratic presidential nomination, the presumptive Republican nominee is trying to collect some much needed campaign cash. John McCain has fundraisers all this week in cities including St. Louis, New York, Boston and Chicago.

Poland's prime minister tells the Associated Press key stumbling blocks to a proposed U.S. missile defense system based in Poland have now been removed. Talks had stalled over Polish demands for help upgrading its military.

And the United Nations secretary general is criticizing Israel for moving forward with plans for 330 settlement housing units on the U.S. banks. Ban Ki-moon says the decision conflicts with Israel's obligations under the so-called road map for Middle East peace.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Let's get back to our top story, the breaking news, the shocker out of New York. New York's governor who advocates the highest of ethics in public is now being linked to a prostitution ring. A source telling CNN Eliot Spitzer is under investigation for allegedly meeting with a prostitute. Spitzer is apologizing to his family and to the public.

(BEGIN VIDEOTAPE)

GOV. ELIOT SPITZER (D), NEW YORK: Good afternoon.

Over the past nine years, eight years as attorney general and one as governor, I've tried to up hold a vision of progressive politics that would rebuild New York and create opportunity for all. We sought to bring real change to New York, and that will continue.

Today I want to briefly address a private matter. I have acted in a way that violates my obligations to my family, and that violates my or any sense of right and wrong. I apologize first and most importantly to my family. I apologize to the public, whom I've promised better.

I do not believe that politics in the long run is about individuals. It is about ideas, the public good, and doing what is best for the state of New York. But I have disappointed and failed to live up to the standard I expected of myself. I must now dedicate some time to regain the trust of my family.

I will not be taking questions.

Thank you very much.

(END VIDEOTAPE)

BLITZER: My next guest wrote a biography on the governor. Brooke Master's book is entitled, "Spoiling for a Fight, the Rise of Eliot Spitzer." She's joining us now on the phone.

Brooke, this is a guy who had a lot of enemies out there. His years as the attorney general of New York. He was a crime fighter. They dubbed him Eliot Ness at one point going after big shots on Wall Street and others. How many enemies did he have?

BROOKE MASTERS, ELIOT SPITZER BIOGRAPHER: You can't count him on one hand. That's for sure. I mean he was hated by Dick Grasso who used to run the New York Stock Exchange. He was hated by and still is hated I think by Hank Greenburg, who was the CEO of American International Group, one of the world's largest insurance companies. Most of Wall Street was really glad to see him run for governor because they just wanted him out of their hair. He is a lot of guy who made a lot of people in very powerful places very uncomfortable.

BLITZER: They're going to be sitting back presumably with a little smirk right now. Given his well known reputation as someone who was not only a crime fighter, but tried to insist on the highest standards of ethics, at least that was the public rhetoric that he always went forward with. Is that right?

MASTER: Absolutely. He was the guy who said we're going to eliminate conflicts of interest. People have to come clean. We're going to clean up the place.

It's stunning that he could be linked on these allegations. He doesn't seem to be denying them, to a prostitution ring.

BLITZER: You saw his wife standing by his side. And obviously she looked deeply, deeply distraught. He's got three daughters. Talk about his family a bit. You wrote this book, this biography, about him. And obviously you know something about the personal side of this man.

MASTERS: This is a guy who met his wife in law school. They were both quite young. They were both right out of college, basically. He had best I can tell only a handful of other girlfriends, all of whom, at least the ones I could track down spoke very highly of him. What a gentleman, what a nice guy.

He cares deeply about his kids. You know, one of the problems with interviewing Eliot is when you sit down and have to talk about your kids and his kids first. He loves his kids. He uses them in his speeches but they're not just lines.

What's interesting about him is he really respects strong women. He wanted, still does, I assume, for his kids to be treated with respect. It's really surprising that he of all people would be linked to a prostitution ring.

BLITZER: And in the public statement we just heard and as our viewers heard, he's not denying it. He's basically acknowledging that there's something there. But he didn't step down. He didn't announce he was resigning or anything like that. What do you think? Is he going to try to fight this, or is he just going to give up?

MASTERS: You know, he's not a guy who gives up. But he's also a realist.

One thing I was always impressed by is he does cut his losses. My guess is he's probably sitting back and thinking can I still achieve what I wanted to achieve when I ran for governor of New York? And I think he probably has to spend a little more time seeing the public reaction. I would not be surprised if he stepped down.

On the other hand, that whole line he gave about how politics is about ideas and not individuals. I think it's not just a line. He ran for office because he believed in his ideas. He thought he could make the world a better place if he ran New York. And if he thinks he can do that and still have the moral persuasion and authority to make the world a better place, he'll stay in office. If he thinks he's just going to be beating his head against the wall I think he goes. BLITZER: When you wrote your biography, did he cooperate with you in helping you better understand who he was?

MASTERS: Yes. I interviewed him probably for the book itself maybe 15 times. I've probably interviewed him maybe 20 other times over the course of reporting for the Financial Times and the Washington Post.

BLITZER: There was never any indication, even looking back now with hindsight, of anything that could have pointed to this kind of a situation.

MASTERS: No and I have to say, I've been on the phone with four or five close friends, really sources from when I wrote the book. You know people who I spent lots of time with and they're all stunned.

BLITZER: Who are his closest --

MASTERS: Obviously, I have not called his wife. I don't know whether she was equally stunned, but certainly the people who worked with him professionally were stunned.

BLITZER: Who are his closest friends and associates with whom he may be consulting right now?

MASTERS: I don't know. As a political ally, Lloyd Constantine was his former boss in the Manhattan DA's office. They were quite close. He'd always been one of Eliot's closest political advisers. I'm trying to think. You know obviously he's very close to his family. His father has been ill. I'm not sure whether he can consult his dad right now. He's always, you know, been very close to his family. He's got two older siblings. I would assume he's talking to them.

BLITZER: Brooke Masters, thanks very much. Brooke's book is entitled "Spoiling For a Fight. The Rise of Eliot Spitzer," a biography of the New York governor. Thanks for that.

Let's get some analysis now on what this means. The Democratic strategist James Carville is here with us in THE SITUATION ROOM.

Let's talk a little bit about this. What do you think?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, first of all if it's just a case and I don't know if it was just a case of he meeting with this woman in a Washington hotel room, I smell a rat here. This thing has gone really overboard. I wonder who is behind the information.

BLITZER: You think he's being set up? Is that what you're saying?

CARVILLE: Might be. I mean I don't know. Obviously he did something wrong. I don't think he should resign just because he saw a prostitute one or two times. Now there may be something much deeper to this story than that, but based on what I've seen so far, I mean it's not right. He ought to apologize for it. He's obviously going to be embarrassed. You can see the pain he's caused his wife, et cetera. But I've got to think that if there's not more to this I wonder if there's not something political shenanigans underneath this.

BLITZER: That would be a whole new element in this story. As you heard, he's got a lot of enemies.

CARVILLE: He has a lot of enemies. Again, there's got to be more to just the fact that he met with a prostitute in that the FBI -- he's like number nine on the list or something like this. It seems to me like if I were in the press, I would be skeptical and want to know more about where this came from.

BLITZER: We don't have any of the details other than this one affidavit that we've seen identifying him apparently as client number nine and there were some phone calls or whatever that were wire tapped.

CARVILLE: Apparently. I mean because David Vitter of Louisiana, I mean the fact that you meet what prostitute. Larry Craig hasn't resigned from the United States senate. So I don't think based on what we know now, I think there's a lot of people that are taking a lot of glee in Governor Spitzer's obviously personal foibles here. I would say that. But I'm just one person to say we need to know more about this.

BLITZER: All of us remember, you know, Monica Lewinsky scandal and the immediate rush to judgment. A lot of people said how could Bill Clinton possibly survive a scandal like that? Yet he managed to survive.

CARVILLE: If it's not a financial or monitory thing involved, which I don't know, if there's not something deeper.

BLITZER: But if he was paying a prostitute, that's illegal.

CARVILLE: That's illegal. But you know a lot of people do a lot of illegal things that are illegal. I don't think this strikes at the cord of his inability to serve the state. OK. Just like I think if someone got a DUI. It's a horrible crime. I don't think they need to resign because of that. obviously he's being very humiliated. But we don't know. Maybe there's more to it. Maybe he's done something more. I don't know what it could possibly be. But it's obviously humiliating to him and it's humiliating to his family.

And a lot of his enemies are pretty happy right now. I wonder if they weren't behind this and behind leaking this. I wonder why the FBI with all the financial shenanigans that are going on in New York in the mortgages and Wall Street and everything else. Why is a guy who met with a prostitute in a hotel room all of the sudden the number one priority of law enforcement in New York? I'll just wait and see.

BLITZER: You know the junior senator from New York speaking out only moments ago on this case. I want to play that byte what Hillary Clinton is now saying about the New York state governor.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATES: I don't have any comment on that. Obviously sending my best wishes and thoughts.

(END VIDEO CLIP)

BLITZER: Well, I don't know about you but I had trouble understanding that. She said something like I don't have any comment on that. Then she went onto say something I didn't understand. Did you hear what she said?

CARVILLE: I did not hear what she said.

BLITZER: Something about best wishes for the family.

CARVILLE: She obviously knows Governor Spitzer, knows Mrs. Spitzer, knows the Spitzer children. She has been through a similar thing. I'm the same way. I saw that moment. The man has three children.

BLITZER: Three daughters.

CARVILLE: Three daughters. He brought it on himself. He did something wrong. I'm just saying, if this is all there is to it that this is an overreaction to something. I want to see more. I'm highly suspicious that there's not some shenanigans going on.

BLITZER: So if he called you and said James, give me advice what would you say?

CARVILLE: I would say you obviously have to do some repair work at home. You've come out. You admitted what you did. And I would find out, I would go to every extreme I could to find out who was behind pushing this story, where was it, were your political enemies motivated by this? If people get that kind of information, it would be the kind of information that they would want to hear.

And you know what? I believe in the doctorate of forgiveness and redemption. He didn't steal anything. If this is all it is. I don't know that. It may be much more than this but if this is all it is I say hang in there. David Vitter didn't resign. Larry Craig didn't resign. Why should you resign? Why should there be a different standard for you than there is for you? That's what I'd tell him.

BLITZER: James, thank you very much.

CARVILLE: Thank you, Wolf, appreciate it.

BLITZER: New York's governor, as we all now know, he's swept up into a huge scandal, linked to a prostitution ring. Can his political career survive, or will Eliot Spitzer be forced to resign? Much more on this story coming up.

Plus, a deadly day for U.S. forces in Iraq, very deadly. Details of the attack that killed five American soldiers.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's get some more now on the breaking news, our top story that we've been following, a well-known governor linked to a prost prostitution ring. Can Eliot Spitzer survive or is this a career ending scandal?

Carol Costello has been working the story for us as well.

What are you finding out, Carol?

CAROL COSTELLO, CNN CORRESPONDENT: Well James Carville aside, here's another politician, Wolf, with his wife by his side, apologizing for past sins. This time it's Democrat Eliot Spitzer, a man known for his integrity.

Can he survive? Others politicians have, despite the efforts of talkative madams, porn king Larry Flint and political opponents.

(BEGIN VIDEOTAPE)

COSTELLO: Maybe Larry Flint would say Eliot Spitzer, there will soon be one less known hypocrite in government. That's how he described Louisiana Senator David Vitter. Flint accused him of a client of the alleged D.C. madam, Deborah Palfrey, after the senator's number was discovered in her phone records. Vitter responded, wife by his side, to committing a very serious sin before he became a senator. But he survived.

SEN. DAVID VITTER (R), LOUISIANA: Unfortunately my admission has encouraged some long-time political enemies. And those hoping to profit from the situation to spread falsehoods too.

COSTELLO: Flint was hoping more scandal would follow. He released this philanderer wanted ad looking for documented evidence of elicit sexual relations of among public figures. It was back in 1998 that Flint launched his first hypocrite hunt and he had some success.

Angry at what he called the hypocrisy of Republican efforts to impeach Bill Clinton, Flint made life miserable for Georgia Congressman Bob Barr. The Hustler publisher cited an affidavit from Barr's wife saying in contrast to his public opposition to abortion, he had driven her to a clinic for an abortion. A federal court dismissed Barr's lawsuit against Flint saying there was nothing to suggest Flint's accusation was false.

Another prominent Republican, former Representative Bob Livingston suffered, too. He was among those calling for President Clinton to resign over the Lewinsky affair saying apologies were not enough.

BOB LIVINGSTON (R), FORMER LOUISIANA REPRESENTATIVE: The president has his own actions to justify. I will not seek to give him council. COSTELLO: Livingston urged a vote to impeach and just as he was about to become house speaker, Larry Flint accused him of infidelity. And Livingston resigned.

LIVINGSTON: I beg your forgiveness.

COSTELLO: But other politicians plagued by scandal also survived.

Idaho Senator Larry Craig, wife by his side, denied improper contact in a men's restroom at a Minneapolis airport.

SEN. LARRY CRAIG, IDAHO: I am not gay. I never have been gay.

COSTELLO: And although the Senate Ethics Committee admonished him for conduct that reflected poorly on the senate, Craig remains on the job he says until the end of his term.

(END VIDEOTAPE)

COSTELLO: And Larry Craig remains on the job even though some Republicans have urged him to step down. Other politicians that survived, Bill Clinton, of course, and Congressman Barney Frank, who admitted to a sexual relationship with a male prostitute, he received a reprimand but he is in office today.

As for Eliot Spitzer, well, Republicans have called for him to resign. We'll see what the Democrats say.

BLITZER: We'll see what happens. All right. A lot more on this story coming up. Thanks very much, Carol, for that.

Saying America's foes would celebrate, a Republican congressman is issuing some dire forecast about what may happen if Barack Obama is elected president, forecast based in part on Obama's middle name.

Let's go to Brian Todd. He's watching the story for us.

Brian, is this just a nasty case of name calling? What's going on?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, this congressman says it's not that. He says he is not bigoted by his remarks have caused a stir among Muslim groups in the U.S. have rippled on the campaign trail.

(BEGIN VIDEOTAPE)

TODD: Congressman Steve King says he has concerns about the potential implications of Barack Obama getting elected president.

REP. STEVE KING (R), IOWA: Our enemies, the terrorists, the radical jihadists, the Islamists will be dancing the in the streets all over the world in greater numbers than they did on September 11th.

TODD: The Iowa Republican says one of his principle reasons for believing that is Obama's intent to pull U.S. troops out of Iraq, which King believes is a declaration of defeat in the war on terror. King also says he doesn't want to disparage anyone on the basis of their race, name, or the religion of parents. But he also has a problem with Obama's middle name, Hussein. And how he thinks Islamic extremists might identify with him.

KING: The name tells them that he has a lineage that goes back and it's a common bond with their culture and their religion. I don't think that he can convince the Middle East that he is not sympathetic to their cause by declaring defeat.

TODD: One of Obama's chief endorsers and advisers, Senator Chris Dodd, lashed out at King.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: To start suggesting because of someone's last name and who their parents are that they'll be dancing in the street some place is so beyond the pail, it's so outrageous that it needs to be denounced across the board.

TODD: The Obama campaign wants Republican candidate John McCain to denounce King, like he has with previous such comments by supporters.

Congressman King has not formally endorsed McCain, but says he does back him. A campaign spokeswoman tells CNN McCain rejects the type of politics that degrades our civics and says that applies to Congressman King's remarks.

But leaders of Muslim groups are divided on whether McCain should even be involved with this. One group that's not formally supporting any candidate says it's a wider problem.

IBRAHIM HOOPER, COUNCIL ON AMERICAN ISLAMIC RELATIONS: I think Representative King was just exploiting unfortunately the growing anti-Muslim sentiment in our society to score some cheap political points.

TODD: Obama's campaign says he got the name Hussein from his father, who they say was born Muslim and became agnostic.

(END VIDEOTAPE)

TODD: This isn't the first time Congressman King has made remarks that have inflamed the Muslim community. After the Abu Ghraib scandal, he called what went on there little more than hazing. He says he stands by that, saying he saw all the pictures and video says he didn't see what he called torture. Wolf?

BLITZER: Are these groups, Brian, these Muslim groups, Arab American groups calling for anything specifically to be done right now?

TODD: The leader of the Arab American Institute, James Zogby, says he's going to lobby to have Congress censure King. Now important to note here, Zogby's group does not formally take a position on any candidate but Zogby himself is a superdelegate who supports Barack Obama. When we told King about Zogby's move, he called that arrogant. He said Congress would never take it up.

BLITZER: Thanks very much for that, Brian Todd with that part of the story.

We're following the developments of these allegations against the New York state governor, Eliot Spitzer. We're going to have the latest, including whether he can survive politically. That's coming up.

And Jack Cafferty is asking how much of an issue is John McCain's history of melanoma, a potentially deadly form of skin cancer? You're email and a lot more coming up on this very busy day right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In news around the world, a series of deadly attacks across Iraq today. Five U.S. soldiers were killed in one of Baghdad's worst attacks on U.S. forces in months. The U.S. military says a suicide bomber struck while the troops were on foot patrol in the capital. Three other U.S. troops and an Iraqi interpreter were wounded in the attack. Today's bombing brings the total number of U.S. deaths in Iraq to 3,980.

JACK CAFFERTY, CNN CORRESPONDENT: How much of an issue is John McCain's history of melanoma, a potentially deadly form of skin cancer?

Christine in California, "His melanoma history is the least of his problems. His age, snarky personality, judgment, war mongering, stubbornness and a joint hip with Bush are of greater concern. His choice of VP is even more critical than for the Democrats."

Bill in Syracuse, New York writes, "The key with cancer is always said to be catch it early. Give McCain's history with the cancer, he has obviously been very vigilant in getting check-ups to be sure it is not returning and if it has, he has obviously been catching it early enough. Being that he's beat it four times already and is that much more aware of it, cancer should not be a concern in the mind's of the voters."

Ken writes, "Really none. McCain seems in good health and wears out the correspondents traveling with him. McCain is an authentic American hero, but I cannot vote for him to continue the Bush "Holy War" in Iraq."

Carol writes, "McCain's health's a very big issue and he's trying to hide it. Melanoma is never cured and he should reveal all the tests and their results for the last four years."

Dan writes, "Melanoma's not an issue as I had one removed in 1989. If not spread below the third layer of skin, it can be totally removed. McCain's problem is not cancer or age, his problem is he's a Republican."

Okwy writes, "Melanoma is little matter compared to the desperation in one half of the blue corner. McCain should hang in there as a safety net should desperation win in Donkeyland."

And Brian writes, "In a word, none. Unless, of course, Dick Cheney turns out to be his pick for VP."

Wolf?

BLITZER: He's been saying for some time, at least to the "New York Times," he's going to release his medical records on the melanoma, and today he said that would happen on April 15th. He's going to release all of these documents, which the doctors want to go through and take a closer look at.

CAFFERTY: Yeah, and Hillary is going to release her tax returns and the donations to the Clinton museum. And the records of what she did while she was first lady. All these people are going to release all this stuff. They've all been campaigning for a year and we're still going to release these records. Just get them up.

BLITZER: All right. Thanks very much, Jack. See you if a few moments.

Let's check in with Lou Dobbs. Lou, you have a show coming up in an hour. But I want to get your immediate reaction to the stunning, stunning allegations now being leveled against Eliot Spitzer, the New York governor. When you heard that, and you've had your problems with Spitzer over the past year over illegal driver's licenses in New York state, what went through your mind?

LOU DOBBS, CNN ANCHOR: Well, what went through my mind is here is a man who is attorney general, upon being elected governor said he was going to create a new atmosphere in Albany. He did. He said he was going to put ethics reform as a priority. He did not.

If this turns out to be true, it is shameless because for every reason, the one of morality, one of just common decency, and certainly legality.

The fact is that he prosecuted prostitution rings, and this is not a simple affair that would be personal business. And frankly, Wolf, I will tell you, under no circumstances would I be reporting on my broadcast about a personal matter had this been an affair. But this is straight forwardly the people's business because it appears he broke the law.

By the way and I heard Jim Carville suggesting that he shouldn't resign. And I understand the partisan impotence on the part of Jim Carville. But the fact is this is a violation of law if it turns out to be true. This is not something that you just simply sort of smile, wink, and nod.

I think the American people have had it, particularly when it comes to the hypocrisy of a prosecutor who goes after prostitution rings and then is involved in prostitution himself. That would be, I would think, absolutely inexcusable.

BLITZER: Because what James Carville was suggesting he's got a lot of enemies. He sort of - he doesn't know anything but he smells a rat, if you will, that somebody was, a political enemy of his may have been setting him up for this kind of situation. That was the point he was trying to make.

DOBBS: Sure.

BLITZER: And say let's get all the facts. Let's take a deep breath.

DOBBS: Well, Jim Carville is not exactly an investigative journalist when he ascertains that Eliot Spitzer has enemies.

You know Partisan politics in this country is a rancid business and point of fact, all of these politicians have enemies, as Carville and as you have just put it. But the reality is that should raise the standard of conduct, not lower it, as apparently Governor Spitzer chose to do here.

BLITZER: And so this is a story - I know you don't like to cover a lot of the "sex tabloid" kinds of stories but this is a story you'll be reporting on on LOU DOBBS TONIGHT.

DOBBS: We'll be covering it because of one very simple reason. A New York governor apparently has broken the law, a governor who has created great problems within the Democratic Party nationally and who has been up until this moment, at least, a sizable figure and from this moment forward appears to be pushing forward some rather sizable consequences for himself, unfortunately for his family and certainly the Democratic Party both at the state level and at the national level.

BLITZER: We'll see you in one hour. Lou, thanks very much.

DOBBS: You got it.

BLITZER: And to our viewers, you're in THE SITUATION ROOM.

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